$483,201 in Back Wages for Overtime Pay Violations By Sullivan University System

Friday, March 9, 2012

The U.S. Department of Labor has obtained a settlement agreement with The Sullivan University System Inc. and the companies it does business as – Sullivan University, Spencerian College and Sullivan College of Technology and Design (formerly Louisville Technical Institute) – requiring them to pay $483,201 in back wages to 248 employees working as either admissions officers or high school representatives.

The agreement comes after an investigation by the department’s Wage and Hour Division that disclosed violations of the Fair Labor Standards Act’s overtime pay and record-keeping provisions. Sullivan University System Inc. is based in Louisville.

The Wage and Hour Division determined that the employees were incorrectly classified by the companies as exempt from the overtime provisions of the FLSA and that the employer failed to keep accurate records of the hours they worked. As a result of these violations, the employees were not compensated for all hours worked and did not receive at least one and one-half times their regular rates of pay when they worked beyond 40 hours in a week.

“These positions did not meet the rules for exemption under the FLSA. The Labor Department is fully committed to ensuring that workers receive the full pay they deserve under federal law for all the hours they work,” said Karen Garnett, director of the Wage and Hour Division’s Louisville District Office. “The fact that the department filed this lawsuit should serve as a notice to other employers that we will pursue such violations using all of the enforcement tools available to us. Employers should take this as an opportunity to examine their pay practices to ensure that they are in compliance with the FLSA and all other federal labor laws.”

The settlement, filed in the U.S. District Court for the Western District of Kentucky, requires Sullivan University System to distribute checks to the affected employees by March 30. Sullivan also has agreed to a permanent injunction prohibiting future violations of the FLSA, and is barred from retaliating against employees covered by the agreement.

The FLSA requires that covered employees be paid at least the federal minimum wage of $7.25 for all hours worked, plus time and one-half their regular rates of pay, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers are required to keep accurate records of all hours worked by covered employees.

Under certain conditions, the FLSA provides an exemption from the minimum wage and overtime requirements for some employees. To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week. Job titles do not determine exemption status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the department’s regulations.